Getting our act together
By: Catherine Mitchell
Published in: The House, 17th April 2015
The energy policy decisions facing the next Government require a dual determination to do the right thing for British society interests (as opposed to the interests of a few big companies, and their supply chains) and the strength of purpose to make fundamental changes to the institutional framework of the GB energy system, which is currently not fit for purpose.
The Tory / Lib Dem coalition has overseen a new Energy Act which has made matters worse: it is leading to a retrenchment of the ‘old’ energy system. However unwanted and wasteful of time and effort, the recent Energy Act has to be replaced and Britain has to start again at getting the building blocks of energy policy right. Continuing with the current Act simply means locking in costs (both economic and time) we cannot afford; energy system management practices which undermine the move to a fit-for-purpose, smart, flexible and integrated system; and maintaining barriers to new practices, new entrants and new customer relationships. If the Act is not replaced, the UK will be treading energy water until four or so years time when we will be forced to rethink a new Act anyway. Yes, this means putting EMR on hold until new decisions are made – but CfDs for nuclear power can be expected to be scrapped, as can the Green Deal. Both disastrous policies for Britain which would never have been put in place had a thorough, society-interest decision-making process been undertaken. Far better we bite the bullet now, surprise our European and global energy partners, and leapfrog, not just catch up with, best practice.
When the new Government gets to power, it has to implement a move to an institutional framework which can provide a legitimate energy policy framework and strategy to 2050. The new Government should announce a timetable to a new Energy Bill (one years’ time) and a program of events to enable access to ‘independent’, ‘expert’ and stakeholder views and knowledge for the benefit of society’s interests.
This will be some rebalancing (to be decided) but might, for example, be from delegated regulation under Ofgem alongside a regulated, private Grid company to a more legitimate, directed process with a state owned, not for profit System Operator who undertakes the technical transformation (like Energinet in Denmark) in parallel to a less powerful economic regulator and various new institutions which better deal with the current problems. For example, a Market Monitor would counter the current lack of transparency of pricing and profits and a new Code and License institution working to the System Operator would counter the constipation of Codes and Licenses.
A successful energy policy which leads to a secure, affordable and sustainable energy system requires a society which understands the impacts of their actions, and one with a sense of responsibility to, and pride in, achieving a sustainable future – something the current energy system and policy does not encourage at all. Cutting our carbon emissions by 80% by 2050 requires a very different energy system and so GB has to become a country which embraces change and doing things differently – yet we are a country with an energy policy which wilfully supports the ‘old’ ways of doing things. Thus, very importantly, a new Government has to engender that sense of pride in being an innovative country, capturing the opportunities of climate change for the benefit of society.
This article was first published in The House and is reproduced with their kind permission.